Is Jean Monnet's dream for Europe ending in nightmare?

No. It has often taken crises to cause Europe to lurch ahead, often inelegantly. The Eurozone crisis is no exception. What’s the main reaction of Europe’s financial and political elites to the threat of potential unraveling? Not a retreat to nationalism. Rather, a proposal for deeper fiscal union. It’s too early to tell whether Europe’s politicians can sell that to Europe’s populations. But betting on the failure of European integration has been a losing proposition for four decades. Each step along the way – most recently with the Lisbon Treaty – integration goes less far than the idealists would propose. But it keeps going, slowly, steadily, incrementally. Ironically, it may take the Eurozone crisis to get Europe to start acting as an integrated financial power – which would reverse the trend of the erosion of European influence. 

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Monnet dreamed of ending Europe’s murderous wars and it came true. It was a political project, but the technique was to proceed cautiously by binding European states through economic inter-dependence without challenging political sovereignty. It worked wonderfully for fifty years. Europeans were never before as free, peaceful, prosperous, healthy, or green.

Their enviable social model became unaffordable because of declining birth rates, aging populations and bountiful publicly funded pensions. The defect in the politically cautious design was to leave all powers to tax exclusively in national parliaments which resisted meaningful European fiscal coordination. It allowed individual Euro-zone member governments to fund unaffordable social programs that kept them elected by deficits and ever-increasing sovereign debt. In consequence, the Euro seems now a bridge too far, but the crisis Europe faces is a debt crisis, not the end of Monnet’s dream of a peaceful Europe.

Saving the Euro will require “more Europe” for Euro-zone countries. European leaders must explain this to voters who no longer reward “Europe” for the state of peace and prosperity they have long taken for granted. But mediocre politicians intimidated by anti-immigrant and anti-Europe right-wing national identity parties fail to argue for big solutions for Europe, while choosing as officials to lead EU instititions politicians even smaller than themselves. Still, the EU won’t unravel, any more than the US will, where aggregate debt and deficits are even higher.

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On the contrary, Jean Monnet’s dream of a united Europe, both politically and economically, is taking slowly taking shape….one of the great developments, if not the greatest together with the gradual equality of women world-wide, in the late 20th century.

There are, were, and will be speed-bumps along the way…we’re going through that now…but the idea of Europe is intact. In addition to the Commission, the Council of Ministers, and other pan-European institutions, there is now an increasingly-relevant European Parliament. More unified policy instruments to support the European currency, for example, will come as the results of not having such disciplines become obvious to all….policy change is incremental in all democracies, Europe included, but the the way forward is clear. The European dream in intact!

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It may well be a “nightmare” (albeit more horrifying for some than for others), but it’s certainly not the end of the Monet dream. The primary objective of the integrative enterprise – to end Franco-German wars and their offshoots among other European states – has been achieved. Exogenous factors, like technological change and the threat for a time of cataclysmic nuclear war, have buttressed the process.

But the process itself has advanced too far to make a complete breakdown a likely, or even a feasible, prospect. Structural adjustments and tactical “retreats” may be required, but a total collapse of the European experiment is not on.

The current crisis has multiple causes, but underlying the various misbehaviours of both creditors (public and private alike) and debtors (also public and private alike) is the fact that the best-intentioned of Brussels Eurocrats, along with the political leaders who have most enthusiastically backed the Monet mission, pressed the Eurozone initiative too hard, too soon.  Monetary policy is the bluntest of the macro-economic policy instruments, and not well suited to uniform application over a single community afflicted by wide disparities in levels of economic development.  Canadians should know this very well. For example, a tight monetary policy crafted to offset an over-heated economy in Ontario has not always been helpful – say – to Atlantic Canada. Fiscal policy is more flexible and can help to compensate. Hence the Canadian political peace is sustained in part by fiscal measures designed to ensure a reasonably homogenous delivery of public services across the country.

Europeanists now appear to confront the need to choose between losing members from the Eurozone, or pouring enormous sums of hard cash into both their own banks and the public coffers of the most beleaguered powers. In practice they are doing some of the latter, but are likely to get a little of the former anyway. The process will hurt.  The pain will afflict some far more than others. In varying degrees, civil disorders will ensue. But they won’t last forever. And Germany and France won’t go to war over the problem.

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